Jun 24, 2023 - Real Estate

Buying a first home in Tampa Bay takes over a decade of savings

Illustration of a book, shaped like a house, with many page markers sticking out.

Illustration: Maura Losch/Axios

Navigating Tampa Bay's housing market, especially as a first-timer, isn't easy.

Why it matters: The share of first-time buyers in the U.S. has reached record lows β€” dropping from 34% to 26% from 2021 to 2022 β€” as inventory and affordability issues persist, per a report from the National Association of Realtors (NAR).

What's happening: Mortgage rates have forced would-be-buyers to the sidelines.

  • If you buy a $300,000 house with 3% down, your monthly payment on a 30-year fixed-rate loan with 3% interest would be $1,933, per Freddie Mac.
  • With 7% interest it's $2,642.

Yes, but: The market is always changing. The right time to buy depends on your personal finances, Sarasota-based real estate agent Hailey Kendall says.

First-time buyers should expect to put 3-5% down, plus an additional 3% in closing costs, Kendall says. For a $300,000 house, that would be around $24,000.

  • Other costs to consider include appraisals, inspections and HOA or condo fees.
Average years it takes a household to afford a mortgage down payment, by state
Data: Zillow Economic Research; Map: Tory Lysik/Axios Visuals

Zoom out: First-timers are also waiting longer to buy. The median first-time buyer age jumped from 33 to 36 from 2021 to 2022, per the report.

  • Saving enough for a down payment is the largest barrier to entry, says Brandi Snowden, a NAR director.
  • Many would-be-buyers are saddled with debt, including student loans, car loans and credit card debt.

Zoom in: It'll take Florida buyers 11.8 years to save up for a 10% down payment on the typical home, Zillow data show.

  • That accounts for saving 5% of the median household income every month.

Why it matters: Affordability could be a "major driver of cross-country moves," as buyers seek a lifestyle within their means, Zillow economists say.

By the numbers: In the Tampa metro area, the length of time is 11 years.

  • The U.S. average is 8.9 years, with states like Iowa as low as 5.2 years and Hawaii as high as 18.4.

The intrigue: 37.7% of Tampa home sales were made in cash in April, as the share of U.S. cash buyers reached a nine-year high, new Redfin data shows.

Bottom line: The right time to buy is when it's right for you.

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